The State of Your Money: Sitting on Tax Dollars
Bob Segall/13 Investigates
13 Investigates has been taking a close look at all that furniture you've been buying. Actually, the state's been buying it -- you've just been paying for it.
Your state government has been busy buying furniture. Lots of furniture. Desks, credenzas, file cabinets, book shelves, couches, coffee tables and thousands of chairs. 13 Investigates has discovered Indiana state agencies have spent nearly $8,500,000 on new office furniture in the past two years.
"They need a place to sit," said Bob Wynkoop, deputy commissioner of procurement at the Indiana Department of Administration. "When we're talking three to four million dollars a year for a state the size of Indiana, I don't think those numbers are out of hand."
But WTHR has discovered in many cases, state agencies chose to spend thousands of dollars for items it could have gotten for much less -- or even for free.
Indiana's Department of Administration operates a surplus warehouse near downtown Indianapolis. Inside the 4500-square-foot building is a sea of used furniture collected from state agencies across Indiana that has already been paid for.
"It comes in from Evansville to Fort Wayne and it keeps on coming," explained state surplus director Bob Flake. "We have trucks to unload just about every day."
On the day WTHR visited the warehouse, we counted 392 surplus office chairs, 306 filing cabinets and 105 desks sitting alongside dozens of tables, bookshelves and credenzas.
It's all waiting for a new home and, according to Flake, Indiana re-distributed more than one million dollars worth of surplus furniture in 2008.
"That's our mission: saving money," Flake said.
But 13 Investigates found many state agencies don't want used furniture. They want new.
NOT GOOD ENOUGH?
Last year the Indiana Department of Insurance took a pass on free file cabinets, turned down surplus chairs and said "no thanks" to free desks. Instead, the agency chose to buy more than $100,000 in new furniture, including $269 office chairs, $432 file cabinets and desks that cost more than $2,000 each. IDOI told WTHR the new items were needed for its Title Division and to replace worn items throughout the agency.
Why not take advantage of the state's warehouse full of used furniture?
"It has been the experience of the IDOI Controller ... that much of the State's surplus warehouse's inventory [sic] is in similar condition to the furniture that was replaced," wrote department attorney Meggan Brumbaugh.
But Flake said his staff closely examines surplus furniture to make sure it is in "useable" condition.
"Some of it's seen better days, but then there's a lot of it that's in very good condition," he said.
Even though you helped pay for IDOI's new furniture, department administrators do not want you to see it. The agency did not respond to eleven separate requests by WTHR to videotape the furniture to show you what you paid for.
Other state agencies spent much more on office furniture in 2008.
According to state auditor's records obtained by WTHR, the Indiana Department of Administration paid $162,395.44 for new furniture, while the Family and Social Services Administration spent $454,765.53 and the Indiana Department of Transportation got new furniture worth $529,432.12.
Some of that new furniture has never been used.
"WE HAVE TOO MUCH"
Last year, INDOT completed a massive 4-floor reorganization at its department headquarters in the state's Government Center North office building.
"With staff spread across four floors ... it became awkward to have to always go up, down, up, down, so we were able to reorganize and consolidate," said INDOT deputy communications commissioner Bruce Childs.
The consolidation resulted in an additional 46 work stations for INDOT employees.
But many of those employees have never been hired due to a state hiring freeze. As a result, INDOT has dozens of empty work stations -- filled with new furniture -- that sit empty.
"It would be nice to be able to say that INDOT will have the opportunity to fill those cubicles, but right now, no," Childs said.
The Indiana Department of Education spent $46,154 on new furniture in 2008. When the state's new Superintendent of Public Instruction took office in January, he discovered the department had too much.
"Frankly, the department right now has more furniture than it needs and we're sending furniture back to state surplus," said superintendent Tony Bennett.
YOU'D BETTER SIT DOWN FOR THIS ONE
The larger issue within some state departments is not the quantity of furniture purchased, but rather the cost of each individual item.
For example, state agencies purchased at least 59 office chairs last year that cost more than $700 each.
WTHR took one of those chairs -- an $842 Steelcase Criterion Plus model -- to Monument Circle to show Hoosier taxpayers what they had paid for. Most were outraged at the cost.
"$842, are you serious?" asked Dinah Biggs, a paralegal who spends much of her workday sitting in an office chair. "Who needs to spend over $800 for a chair?"
"You've got to be kidding me!" said IT specialist Scott Schnoenherr. "$842 for that chair is ridiculous. It's a gross misuse of taxpayer money."
State administrators say they have purchased several of the $842 chairs and claim they had no choice.
"That particular chair is purchased for employees with disabilities," said Wynkoop.
Another state administrator, who asked not to be identified, provided more details: "We got the chairs for large state workers -- people who weigh almost 300 pounds -- and we have to do that or we'd get in trouble. It's considered a disability," the administrator explained.
WTHR found similar chairs with a 350-pound weight rating for less than $450, and by searching the internet, we also found (and purchased) a used Steelcase Criterion Plus chair for $250 -- a 70% savings compared to the "new" price paid by Indiana taxpayers. The used chair is in excellent condition.
GOING TO PRISON
13 Investigates found the state could save significant money by buying new furniture from itself.
The Indiana Department of Correction operates a furniture factory at its Pendleton Correctional Facility, where inmates like convicted murderer Samuel Jackson are trained to produce high-quality office furniture.
"We can produce just about anything," said Jackson, a quality-control supervisor at the factory. "It gives us a chance to give back and we take great pride in what we do here."
Furniture produced at the prison factory is sold by Pen Products, a separate division of IDOC. It looks nearly identical to the furniture sold by retail companies and, in many cases, it costs the same or less than what state agencies are buying elsewhere.
Last year, Indiana's Department of Environmental Management bought 293 chairs from Pen Products.
"They're very good chairs," said IDEM public information officer Amy Hartsock, adding that the department is pleased with its purchase.
Pen Products' director says the program is designed to produce more than good furniture.
"At the same time, we're teaching the inmates work ethics, job skills and preparing them for the outside," said Mike Herron. "It's a win for everyone."
And while Pen Products does not always provide the lowest bid price for office furniture, its products often are priced lower than comparable furniture produced elsewhere. It also delivers its products to state agencies at no additional charge.
For example, Pen offers a 350-pound weight rated "TUF cop" oversized office chair for $438 (about half the cost of the Steelcase Criterion Plus chair), and other office chairs starting at $136.
In a side-by-side test at Monument Circle, those who sat in both the Criterion Plus and TUF Cop chairs said the Steelcase chair felt more comfortable, while the Pen Products chair felt more sturdy.
"This one would be absolutely fine," said customer service representative Lynn Roland as she sat in the TUF Cop chair. "It's comfortable and I could definitely make it work."
"If I could save $400 of my tax dollars to sit in this chair, I'd say it's worth it," he said.
And while some office furniture retailers charge the state a fee to deliver their products, Pen Products delivers at no additional charge.
IGNORING THE LAW
For Indiana state agencies, buying from Pen Products isn't only a potential cost savings. It's also the law.
Indiana Code states "a government body shall purchase from the department of correction" if Pen Products can produce the furniture in a timely manner, meet the specifications of the state agency and provide items at a fair market price.
13 Investigates found many state offices such as the Department of Insurance, Department of Workforce Development, Department of Health and State Supreme Court simply ignore that law.
Last year the state Supreme Court and Indiana Judicial Center moved its offices into a downtown Indianapolis office building to save money.
But during the move, the agencies spent $435,453.01 for new furniture without ever contacting Pen Products for a bid.
"We made the decision that we did not believe Pen Products was the viable option for this large and this quick of a purchase," said Supreme Court spokeswoman Kathryn Dolan.
But Dolan admits the department never took the time to asked Pen Products whether it could meet its deadlines. The Supreme Court and judicial center signed leases for their new office space in July 2007 and did not move until January 2008. Pen Products says that would have been plenty of time to fulfill an order.
And if the Supreme Court had bought from Pen Products, it could have saved tax payers tens of thousands of dollars.
"We did not buy the lowest end furniture but we didn't buy the most expensive either," said Dolan. "We chose middle range furniture pieces that were professional as well as would last ... That was our main goal and we did that without going over budget."
The high court and judicial center were given a $500,000 allowance for their move. According to Dolan, the funds were allocated from previous savings achieved by the court, and she said the court stayed within its budget by re-using some old furniture brought from its former offices.
But could the court have saved taxpayers even more money by not purchasing eight "royal plush" lounge chairs that cost $1139 each, a cherrywood credenza costing $2511 and a $6042 custom-made presenters table? In a statement provided to WTHR, the Supreme Court vigorously defended all of the items and said the furniture purchased for its work environments is appropriate.
Wynkoop, who oversees furniture procurement for the state, thinks otherwise.
"No one should spend that kind of money on a credenza or lounge using state dollars," he said. "They should look to save taxpayer dollars whenever possible."
WATCHING OUT FOR TAXPAYERS
So why were the furniture purchases approved?
Wynkoop says his agency has control only over executive state agencies, and the courts and quasi-state agencies have final say over their own expenditures.
As far as enforcing the state law requiring agencies to purchase from Pen Products whenever possible, the Department of Administration would not accept responsibility. Wynkoop says his office can only "encourage" agencies to seek a bid from the Department of Correction.
"We'd be happy to sit down with any agency and talk to them about their options," he said. "They should be frugal with their dollars."
Some agencies are making frugal furniture purchases.
The Department of Homeland Security bought several executive office chairs last year. It didn't spend $842, $500 or even $200 for those chairs.
"I doubt my boss would approve an expenditure like that," said John Buchman, who authorized the purchase.
The new chairs cost $84.60, and Buchman insists there's nothing wrong with that price -- or with the chairs.
"My employees have been using them every day. They serve our needs and they're reliable," Buchman said. "They're good chairs, and we watch to make sure we get a good deal for everything we do."
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